Telecommunications, Media And Technology (TMT) Law Update – Volume 6

Key developments during July 2016 in the area of Technology, Media and Telecommunications (TMT) are summarised as follows.

Online betting calls lawfully recorded
The Supreme Court of Tasmania has ruled that evidence in a criminal trial of a recorded telephone conversation between the appellant and a gambling company had not been unlawfully obtained: Dimech v Tasmania [2016] TASCCA 3. The Listening Devices Act 1991 (Tas), anFGd equivalent legislation in other States and Territories, prohibits the use of a listening device to record a “private conversation” in the absence of express or implied consent. The court was of the view that it was “not at all unusual for telephone communications of a commercial nature to be recorded” and the appellant should reasonably have assumed that this would be the case, notwithstanding the absence of a recorded message advising that the ensuing conversation was being or may be recorded. The court emphasised that the actual details provided by an individual during a telephone transaction of this nature may themselves be of a confidential nature but this “did not make the telephone conversation a private conversation in the relevant sense”.

Spam penalties imposed by Federal Court
The Federal Court has fined a hospitality company $150,000 for making 5,293 telemarketing calls to numbers registered on the Do Not Call Register in contravention of Section 11(1) of the Do Not Call Register Act 2006: Australian Communications and Media Authority v Getaway Escapes Pty Ltd and Day [2016] FCA 795. The company was fined a further $150,000 for disabling the calling line identification facility of the automated dialling system so as to prevent the caller number being displayed to recipients, in contravention of Section 8(1) of the Telemarketing and Research Industry Standard 2007 and Section 128(1) of the Telecommunications Act 1997. The second respondent, a director of the company, was personally penalised a total of $25,000 for the contraventions. In imposing the penalties, Justice Rangiah took account of the fact that the contraventions had continued for a fortnight after initial notification by the ACCC that complaints had been received. His honour further observed that, although the company was in liquidation with no capacity to pay the penalty, it was nevertheless important to satisfy a broader objective of general deterrence in order to discourage others from engaging in similar conduct.

Storage obligations relating to personal information
The Australian Information Commissioner has awarded compensation to a claimant whose personal information was stored by a telecommunications company in a shipping container which was accessed by trespassers: ‘IX’ and Business Services Brokers Pty Ltd t/a TeleChoice [2016] AlCmr 42. The shipping containers in which the company stored customer records were secured and locked but located on land which was unfenced and accessible by members of the public. The Commissioner held the company had failed to take “reasonable steps” to ensure the security of the information as required by Australian Privacy Principle (APP) 11.1. The Commissioner further found that the company had breached its obligation under APP 11.2 to destroy or de-identify information which was no longer required. The complainant was awarded $3,500 compensation for anxiety and stress suffered as a result of the breaches but her claim for aggravated damages on the basis that the company prolonged the proceedings unnecessarily was rejected. A similar finding, and award, was made to another claimant arising out of the same incident: ‘IY’ and Business Services Brokers Pty Ltd t/a TeleChoice [2016] AlCmr 44.

Distinction between “general know-how” and “confidential information”
On 8 July 2016, the Supreme Court of New South Wales rejected an application by a manufacturer of alcoholic products to restrain the use by ex-employees of its recipe for aromatic bitters on the grounds the information was confidential: Europa International Pty Ltd v Child [2016] NSWSC 923. Although the case was not strictly a “TMT” judgment, and whilst the decision ultimately turned on its facts, the case provides a useful reminder to employers in a range of industries, including software developers, that there are limits to the extent to which courts will restrain the use of general knowledge and skills acquired by an employee in the course of his or her employment. Citing a range of earlier decisions, Justice McDougall emphasised that accumulated knowledge, skill and experience acquired by an employee in a particular field, even if imparted by the employer to the employee in confidence, might not be protected in circumstances where it had metamorphosed into the employee’s “general know-how”. The Court also emphasised that plaintiffs should avoid using an action for breach of confidentiality for the purpose of restraining an employee against competition – if a restraint is required, it should be the subject of an express covenant, the reasonableness of which could then be assessed by the Court. Finally, the judgment serves as a reminder that if contractual constraints on the use of confidential information are to be effective, it is important to define what is embraced by the term “confidential information” as precisely as possible.

Former staff liable for breach of confidence
On 15 July 2016, the Federal Court held that a former staff member of the applicant company misused the applicant’s confidential information when developing an IT system for use in a rival business, even though there was insufficient evidence to support a claim for breach of copyright: TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd [2016] FCA 815. The breach of confidence related to the appropriation by the second respondent of user names and passwords related to the applicant’s customers, contrary to an implied confidentiality term of the respondent’s employment contract and also in breach of his equitable duty of confidentiality. The court declined to make a similar finding against the third respondent, another former employee, because he had acquired the information indirectly and not from the employer. The copyright aspect of the claim against all respondents failed on the basis that whilst there was some evidence that code had most likely been copied, this did not represent a substantial part of the applicant’s software, the judge observing that “the amount of code copied is trivial from a quantitative point of view, and no functional analysis was attempted”.

New South Wales public sector agency liable for breach of privacy
On 27 July 2016, the NSW Civil and Administrative Tribunal ordered the NSW Department of Finance and Services to pay $5,000 in damages to two individuals for the Department’s misuse of personal information which had been disclosed by them to the Department: APV v Department of Finance and Services [2016] NSWCATAD 168. The Department was found to have breached sections 17 and 18 of the Privacy and Personal Information Protection Act 1998 (NSW) by using and disclosing without the Applicants’ consent, information about their property and substantial renovation and conservation works which they had undertaken on it. The Department had disclosed personal information (such as the Applicant’s address, photos of the interior and exterior of their property and floor plans) to an external architect who was to prepare a Conservation Management Plan and Schedule of Repair Works, which the Department used for the purposes of marketing and selling of a number of properties, including the property next door. The marketing materials which included the Applicants’ personal information were disclosed to prospective purchasers and the Department also filed a regulatory application which also included such information with the City of Sydney. The Applicants sought the maximum award of $40,000 in damages allowed under section 55 of the Act, claiming they had planned to offer renovation and conservation consultancy services using their experience gained from working on the property, and that, as a result of the Department’s conduct, their ability to do so had been compromised. Whilst the Tribunal accepted the “Applicant’s potential to exploit their intellectual property was diminished”, it found that the evidence did not justify such an award of compensation. The Tribunal instead awarded the Applicants $5,000 for the financial loss caused by the Department’s conduct.

Australia’s digital competitiveness
The World Economic Forum, in its Global Information Technology Report 2016, published on 6 July 2016, has concluded that Australia’s digital competitiveness slipped last year, with its Networked Readiness Index rank falling from 16th to 18th place. The group of top ten performers remained unchanged from last year, consisting of a mix of high-income South East Asian (Singapore and Japan) and European (Finland, Sweden, Norway, the Netherlands, Switzerland, the United Kingdom and Luxembourg) countries, as well as the United States. Key observations in the report embraced the changing nature of innovation based on digital technologies, the increasing pressure on firms to innovate continuously and the failure by businesses and governments to keep pace with the “rapidly growing digital population”. Malaysia was identified as the leading emerging and developing Asian economy in 2016, with the other top performers in this category being China, Mongolia, Sri Lanka and Thailand.

National Research Infrastructure Capability Issues Paper Released
The Federal Government is developing a new “Roadmap” to help guide investment decisions over the course of the next decade to support Australia’s national research effort. The Paper is intended to assist the Government identify Australia’s key “infrastructure” requirements (assets, facilities and services) and Australia’s “capability areas” of research to prioritise through greater public investment in related infrastructure. A number of capability areas are identified in the Paper, including “data for research and discoverability” and “advanced physics, chemistry, mathematics and materials”. The Paper addresses investment-related financing models and discusses emerging and desirable capabilities in these key areas. The Paper comments, for example, on the importance of developing integrated national services in relation to cloud-based collaboration environments, trusted data repositories and virtual laboratory support. A consultation period regarding the issues raised in the Paper will run from late July to early September 2016. Submissions can be made until 9 September 2016 and an exposure draft of the Roadmap will be released thereafter.

Broadband Speed Claims Discussions Paper
The Australian Competition and Consumer Commission has released a Discussion Paper in relation to the marketing of broadband services in Australia. The ACCC released a related guidance paper in 2011. The ACCC considers that the development of technologies and marketing approaches since that time have given rise to a lack of appropriate and meaningful information being provided to consumers. The Paper treats the concept of the “speed” of a broadband service broadly and as embracing a range of factors affecting a consumer’s experience, such as stability and latency, in addition to the generally understood definition of “a measurement of both the data rate downstream and upstream experienced by the end-user consumer”. The ACCC’s preliminary view concerning representations about the “speed” of a broadband service is as follows. Such representations when made by retail service providers should relate to the performance of the connection from the consumer’s premises to the service provider’s network (excluding any devices inside the consumer’s premises not supplied by the provider). The Paper calls for submission by 25 August 2016 in relation to a range of relevant issues, including network management and monitoring services delivered on next generation networks, peak period demand, prioritisation of network traffic and data intensive applications and services. Whilst the Paper is primarily focused on fixed broadband speeds, submissions are also called for in relation mobile broadband speeds and related representations.

Rights and responsibilities of users of open NSW Government data
Earlier this year, the NSW Government released the 2016 Open Data Policy (Policy) as part of its Information Management Framework. The Policy sets out six open data principles, which are designed to assist NSW Government agencies manage data, including its collection, handling and release. The Policy focuses on “datasets” – being “identifiable collections of government held information or data” and its objectives include assisting NSW Government agencies “release data for use by the community, research, business and industry” and to “use data to inform the design of policy, programs and procurement”. Building on the Policy, the NSW Government recently released a statement detailing a collection of rights and responsibilities of open data users, which are said to include researchers and other members of industry and the community. The statement presents the rights and responsibilities by reference to the same six open data principles as set out in the Policy. For example, open data users are said to have rights to “access any NSW Government data unless there is an overriding public interest against disclosure”, “without undue delay” and in an “original, unmodified form”. Open data users are said to also have a range of responsibilities, including to “contribute data they create and collect in the open data ecosystem”, to “share links to products or services (apps, articles, visualisations) that make use of open data” and to “use and interpret data responsibly, recognising any analytical limitations of the data”. The Government has invited comments on the statement through the Data NSW blog or via email at datansw@finance.nsw.gov.au.